We're seeing a major slump in the real estate market here in Korea... and it's not easy... even for majors... to stay in business lately. That's why a lot of them are turning their eyes to overseas.
Well... there's one construction firm that's been doing just that for over three decades... focusing on international projects: Ssangyong E&C.
The company is particularly well-known in Singapore and elsewhere in Southeast Asia.
I sat down with Mr. Kim Seok-joon, CEO of Ssangyong to learn the secrets behind his success.
■ Brief introduction
Ssangyong Engineering and Construction was founded in 1977... after the Ssangyong Group decided to beef up its construction business.
From the get-go, the company focused on establishing foreign branches, establishing itself as a leader in overseas projects.
Since then, Ssangyong E&C has reached 19 countries, mainly in Southeast Asia and in the Middle East, winning more than 130 construction deals... worth 7-point-8 billion dollars.
In particular... Ssangyong built reputation as a major in the high-end market... specializing in building hotels and hospitals.
It built Westin Stamford hotel... now re-branded as Swissotel Stamford in 1986... which was then the Guinness record holder as the tallest hotel in the world.
At the moment... Ssangyong is writing a new history... by building Marina Bay Sands in Singapore.
■ Interview : Kim Suk-joon, Chairman & CEO of Ssangyong E&C
-Mr. Kim, thank you so much indeed for joining us today.
▶Thank you very much.
- Let me get to brass tacks. Is there a particular reason why Ssangyong has been focusing so much on overseas markets especially on high-end projects?
▶ Ssangyong has accumulated many good track record on high-end construction. So it's very natural that we can target for this high-end market. And practically not many companies in the world can do this because it requires its own technological background and good engineering skills.
- Regionally-speaking your company name is by far the most well-known in Singapore. You've done quite a lot of projects there. I believe more than 30, am I right?
▶ Yes, correct.
- Why Singapore? Why did you choose Singapore as your base?
▶ Well, we like Singapore market because Singapore is open market. It's very transparent. And we started with very good project which gained a good reputation.
- Obviously, building luxury hotels won't keep you in business especially in these times of economic downturn. What other projects are you focusing on right now in Singapore and elsewhere?
▶We have.. we are undergoing... our undergoing projects such as some government projects like subway lines or underground highway project which is another very huge, very important project in Singapore. So those high-end architectural projects as well as what we call very complicated civil works are our main projects.
- I have this quote by you. A very famous quote, I think. You said that a company CEO must run out to battle with his weapon. Now... I understand you're a kind of man who likes to keep your hands on everything, be there on construction sites at all times. How does that your people or your business?
▶ We were kind of resting from doing overseas activities in early 2000 and for a few years because of this IMF crisis in Asian market made us very slow condition for doing overseas jobs. So we were concentrating more on the Korean market. Naturally, my company people were getting less experiences in doing overseas businesses. That was really not good for the company. So I really needed to go to the front of the line doing businesses, giving my people more morale boosting. Since then I'm working just a part of our team, not as a CEO but as a part of the team.
- So you're still on the frontline?
▶ I think so. (haha)
- All right. Let's talk about your slogan for this year and the next. It says "New Future, Green Ssangyong." Why green?
▶ There are many ways of doing green construction. Most of all.. many governments or big clients they want to have their own green something... like green new building, green new hotel, green new construction method, which can create a lot of future opportunities for company like us. That's why we're targeting green construction.
-Does that require extra budget in designing or constructing those buildings?
▶ Yes. It requires extra budget. Well, many engineers and planners they know after we give more budget for doing more green-related construction design and construction will eventually reduce the cost of energy in the future.
- Speaking of green buildings, so to speak, you're currently involved in constructing the biggest resort, hotel in Singapore which is Marina Bay Sands. Is that based on green construction technology as well?
▶ This Marina Bay Sands is not the monumental green-related building. However the general green, conservation of energy kind of things are much upgraded than the buildings that were completed much earlier, a few years ago. However this building is more iconic for its design and its, the structure looking and the location.
- You just said the design of Marina Bay Sands is very unique. Tell us in detail.
▶WE HAVE HALF JOKE HALF SERIOUS TALK AMONG our contractors what we said is architect’s dream is contractor’s nightmare… the design concept just like 52 degree u know lean-down type of structure and it’s really difficult for us to build but very luckily we could achieve this client and architect’s dream without no nightmare so I am very happy on this.
The company plans to do what it does best this year:
focusing on overseas markets.
This is more so since the domestic construction market
has yet to show signs of full-scale recovery.
The housing market is virtually frozen...
while public sector projects are on a downward trend.
Ssangyong is aiming half of its total revenue to come from overseas...
from 40-percent last year.
-Can you tell us in detail what projects are underway other than Singapore?
▶We have a number of projects in Indonesia, Malaysia, India, Pakistan those are mainly high-end architecture projects as well as some harbor, highway civil works and we just completed the world’s largest dissemination plant in Dubai, Saudi Arabia….teaming up with a French company and we are focusing onto…this new growing mkt such as Abu Dhabi, Qatar or other gulf countries as well as North Africa.
- So basically you are expanding your presence not only in Southeast Asia and the Middle East …(correct) Are you looking at other regions as well other than those two?
▶ When we go to some market eventually we have to what we call our feet should be deep into their soil so that we can do more better service for our client so we are very careful to go into new mkt but already the mkt we jumped in are quite a number of diff countries so we are quite well diversified.
- Mr. kim I have one final q for you what’s ur outlook on the global construction sector this yr..
▶ This year my company will do overseas work for about 50% and another 50% will be domestic mkt so I hope we’ll have good balance but more importantly the future mkt for us the contractors is very important is bc of when the mkt is moving then we follow that’s s very simple logic and one expert forecast the future mkt in 10 yrs space worldwidely about one five trillion 15 tn market will be...
- that’s dollars?
▶In us dollar base 15 tn USD will be…will be (created) created invested so out of 15 tn I think nearly 30, 40% of this portion will be given to construction industry so that’s very good news.
-Certainly good news for you. All right Mr. kim thank you very much for talking with us today.
▶Thank you very much..